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Simon Property Group Inc. on Tuesday reported a 96.5% occupancy rate at its shopping malls and outlet centers at the end of 2024, the highest percentage in the last eight years for the largest owner of malls in the United States.
“We signed more than 1,500 leases for 6.1 million square feet in the quarter,” Simon Chief Financial Officer Brian McDade said during a conference call that followed the release of fourth-quarter and year-end earnings information. “For the year, we signed a record 5,500 leases for more than 21 million square feet.”
Indianapolis-based Simon reported funds from operations, or FFO, of $1.4 billion for the quarter that ended on Dec. 31, or $3.68 per share. That exceeded the average estimate of nine analysts surveyed by Zacks Investment Research, who expected quarterly FFO of $3.40 per share.
FFO is a closely watched measure in the real estate investment trust industry. It takes profit and adds back items such as depreciation and amortization.
“We’re lease, lease, lease,” Simon Property Group CEO David Simon said during the late-afternoon conference call. “It’s not overly complicated.”
For the year, FFO reached $4.88 billion, or $12.99 per share. In 2023, the figure was $4.69 billion, or $12.51 per share.
Real Estate FFO for the year was $4.6 billion, or $12.24 per share compared with $4.41 billion, or $11.78 per share in the prior year, an increase of 3.9% year-over-year.
Providing guidance for 2025, McDade said the real estate funds from operations figure is expected to be within a range of $12.40 to $12.65 per share.
“I’m pleased with our financial and operational results in the fourth quarter, concluding an exceptional year for our company,” David Simon said. “We returned a record of more than $3 billion to shareholders in cash dividends. Now we have paid approximately $45 billion to shareholders in dividends over our history as a public company.”
Simon Property Group became a publicly traded company in December 1993. David Simon serves as CEO, chair and president of the company founded in 1960 by his late father, Melvin Simon, and his uncle, Herb Simon.
David Simon, a North Central High School and Indiana University alum, joined Melvin Simon & Associates, the predecessor of Simon Property Group, as chief financial officer in 1990. He became CEO in 1995. He has served as chair since 2007 and president since 2019.
In May 2024, the company disclosed that Simon was being treated for cancer but provided no details about the type or length of treatment. Simon, 62, has participated in all three quarterly earnings calls since the disclosure made in a Securities and Exchange Commission filing.
Simon said the 96.5% occupancy rate by stores, restaurants and other tenants still leaves room for improvement.
“We’re still not at our high,” said Simon, referring to percentages posted in 1997 and 2014.
“Here’s a message to my leasing team, if they’re listening,” he said during the conference call, offering a good-natured challenge. “I don’t mind if they’re not listening, if they’re making a lease. Let’s get up to our record high of 2014, and then we’ll take a deep breath. But we won’t until then.”
Tuesday’s revenue report by Simon was mixed. The real estate investment trust reported fourth-quarter profit of $667.2 million, or $2.04 per share, a decrease from $747.5 million, or $2.29 per share, in the year-ago period.
Profit for the year was $2.368 billion, or $7.26 per share, higher than 2023’s $2.28 billion, or $6.98 per share.
Simon Property Group indicated that 2024’s profit included after-tax gains of $386.4 million from the sale of the company’s remaining ownership interest in Authentic Brands Group and the recent combination of JCPenney and SPARC Group—renamed Catalyst Brands in January.
Simon is a shareholder of Catalyst Brands, which is made up of Aéropostale, Brooks Brothers, Eddie Bauer, Lucky Brand, Nautica and JCPenney. Simon CFO McDade noted that Reebok recently exited the Catalyst group through a sale. Forever 21, meanwhile, is being evaluated for “strategic options” by Catalyst’s leadership.
Simon’s board of directors declared on Tuesday a quarterly dividend of $2.10 per share, a 7.7% year-over-year increase, to be paid to shareholders on March 31.
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